Effective interest method of bond amortization: When bond is sold at premium, the amount of premium must be amortized to interest expense over the life of bond. The preferred method of amortization is the effective interest method. In this method, the amount of interest expense in a given year will correlate with the amount of the
Retirement of bonds: When a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated
The amount of interest expenses that should be reported in consolidated income statement for 20X3.
b
Effective interest method of bond amortization: When bond is sold at premium, the amount of premium must be amortized to interest expense over the life of bond. The preferred method of amortization is the effective interest method. In this method, the amount of interest expense in a given year will correlate with the amount of the bond’s book value.
Retirement of bonds: When a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries is required to be prepared in consolidated financial statement.
The amount of gain or loss on constructive bond retirement to be reported in 20X3.
c
Effective interest method of bond amortization: When bond is sold at premium, the amount of premium must be amortized to interest expense over the life of bond. The preferred method of amortization is the effective interest method. In this method, the amount of interest expense in a given year will correlate with the amount of the bond’s book value.
Retirement of bonds: When a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries is required to be prepared in consolidated financial statement.
Preparation of elimination entries for consolidation work sheet for December 31, 20X3.
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Chapter 8 Solutions
ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
- What is the value of ending inventory assuming the use of direct costing?arrow_forwardHow many time par year does the company turn over its accounts receivable?arrow_forwardThe following information is taken from the financial statements of a company for the current year: Current assets $ 3,95,000 Total assets $ 8,90,000 Cost of goods sold $ 6,50,000 Gross profit $ 2,00,000 $ 1,20,000 Net income The gross profit percentage for the current year: A. 24% B. 31% C. 76% D. 60%.arrow_forward
- Zeel Corporation has an inventory period of 48 days, an accounts receivable period of 8 days, and an accounts payable period of 5 days. The company's annual sales are $195,620. How many times per year does the company turn over its accounts receivable?arrow_forwardWhat is Anna's asset turnover forarrow_forward4 MCQarrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305088436/9781305088436_smallCoverImage.gif)